The long run is a period of
a. at least one year.
b. sufficient length to allow a firm to expand output by hiring additional workers.
c. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production.
d. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.
C
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The basic incentive problem is that owners and employees:
A. generally operate in perfectly competitive markets. B. are both concerned about sales maximization. C. have fundamentally different objectives. D. need government assistance to solve differences.
The lateral decision-right assignment is carried out on the basis of
A. the distribution of knowledge and the coordination and control costs. B. technological advances that allow firms to flatten their management structures. C. the strength of the team of the local managers. D. the degree of vertical integration of firms.
There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year.
Suppose the department of defense proposes to build a third base in the state of New Porkswick. The
state representative from New Porkswick will ________ this proposal because ________. A. support; it is socially optimal for Katlandia to have a third army base. B. not support; the benefits to his or her constituents would be smaller than the resulting increase in taxes. C. not support; it is not socially optimal for Katlandia to have a third army base. D. support; the benefits to his or her constituents would outweigh the resulting increase in taxes.
As one is beginning to learn economics, one should expect to learn
A. everything one needs to become an economist. B. very little that will be useful in the real world. C. a new way of thinking about the world. D. the gross domestic product of every country in the world.